Social Entrepreneurship, Social Enterprise and Ethics - Term Paper Example

Social enterprises can be integrated as a non-profit or for-profit and may assume the form of a mutual organization, co-operative, charity organization or social business (Bull, 2006; Martin and Thompson, 2010). Social Enterprise and Ethics Besides experiencing an increasing trend these social enterprises are not practicing on ethical grounds and are needed to consider ethical principles while executing their decisions. People’s confidence in the integrity and honesty of these social enterprises is decreasing day by day and lack trust these enterprises consider social benefits while conducting business activities.

As proposed by Rhode & Packel (2009), numerous factors impact the ethical decision making within all sorts of organizations and in order to solve the problem of rising misconduct, an in-depth analysis of such factors is needed. The proposed factors include moral awareness, moral decision-making, moral intent, and moral action. And individuals vary on these grounds causing cognitive biases that lead to the development of unethical behavior. Being a part of business enterprise, the organizational culture and structure also help in manipulating individuals’ acts and decisiveness on moral grounds.

The authors also provided the main areas where ethical considerations may arise in a non-profit organization such as social enterprise. These include conflicts of interests, compensations, publication & solicitation, investment policies, financial integrity, strategic management, and accountability. Thus in order to encourage ethical decision making, certain guidelines provided may be followed such as ensuring effective and efficient codes of conduct as well as compliance programs, encouraging effective management of financial affairs and incorporating an ethical culture that inhibits immoral conducts.

But all these measures would be ineffective if ethical reasoning does not descend from the people occupying leading positions. The importance of ethics can’t be neglected in any sort of organization or personal decision making but its significance in nonprofit sector can’t be neglected as it forms the basis of societal gain and its violation may result in hurting not only the economy but also the social aspects of the world.